New law brings big change to IRS in IT, cyber

A new law will implement a raft of technology and cybersecurity reforms at the IRS while also restoring hiring authorities that officials say are key to attracting qualified IT talent.

Shutterstock photo ID: photo ID: 245503636 By Mark Van Scyoc Sign outside the Internal Revenue Service building in downtown Washington, DC on December 26, 2014.
 

A new law will implement a raft of technology and cybersecurity reforms at the IRS while also restoring hiring authorities that officials say are key to attracting qualified IT talent.

The Taxpayer First Act, signed into law by President Donald Trump July 1, restores the agency's streamlined critical pay hiring authorities through 2025. The program allows IRS to sidestep normal federal hiring protocols to quickly make new hires and offer substantially higher pay -- as much as $240,000, according to the Treasury Department's inspector general – to candidates with cybersecurity and tech backgrounds.

Multiple commissioners -- including current Commissioner Charles Rettig -- have pled with Congress to restore the authorities after they lapsed in 2013, saying they will be needed as IRS embarks on a number of major IT modernization and cybersecurity enhancements over the next half-decade.

On the modernization front, the Taxpayer First Act would call for independent oversight of 'the tax agency's oft-troubled Customer Account Data Engine 2, or CADE2. That system is meant to replace the 60-year-old Individual Master File as the agency's primary system for processing electronic tax returns, but the program has encountered numerous delays over the years. The law gives IRS a year to contract with an independent reviewer "to verify and validate the implementation plans," including performance milestones and cost estimates.

The law also contains language formalizing the IRS CIO's role as the primary official in charge of development, implementation and maintenance of information technology at the agency and directs the agency's chief procurement officer to notify and consult with the CIO for all IT purchases over $1 million.

The agency recently unveiled a six-year IT transformation plan that is expected to cost $2.7 billion, and appropriators have expressed wariness about funding the endeavor without assurances that the IT and purchasing shops are working in tandem. Past audits have found that IRS has wasted millions of taxpayer dollars purchasing software systems and licenses that it either never used or didn't meet agency requirements, while CIO Gina Garza told Congress she wasn't consulted about a $7 million bridge contract for fraud prevention and e-authentication services awarded to credit agency Equifax in 2017 shortly after the company announced it had been hacked.

Cutting down on identity theft and return fraud has been a major priority for IRS in recent years. While officials have credited closer cooperation with industry and alterations to software systems like the Return Review Program for declining rates of both crimes since 2015, ensuring the agency is effectively utilizing all its tools remains a concern for overseers.

The law would create a new Identity Protection Personal Identification Number that could eventually replace Social Security numbers. For years, officials at IRS and Treasury have complained that Social Security numbers no longer serve as viable markers to authenticate a taxpayer's identity.

The new identity PINs will not immediately supplant Social Security numbers, as they would only be issued to taxpayers who request one, and the department won't have to make them available to every American until 2024. The new law also creates a single point of contact at the IRS for victims of tax-related identity theft.

The government is largely moving away from such "knowledge-based" verification practices, and as a Government Accountability Office report released in June found that large-scale data breaches like the 2017 Equifax hack have made Social Security numbers and other signifiers so prevalent on the black market that they are essentially useless for authentication.

The agency was also given authority to create an Information Sharing and Analysis Center that would be focused on curbing identity theft and return fraud. The center would be permitted to share return information with specific members in certain instances for cybersecurity purposes and to prevent identity theft. However, the law intends for such information to be closely guarded, and cabinet officials must conduct on-site reviews every three years or at the mid-contract point for every contractor at their agency who would have access to such information to ensure they're complying with necessary security requirements.

Adequate funding remains a concern after a decade of budget cuts have hollowed out IRS' personnel and enforcement capabilities. The Professional Managers Association, a national membership association representing non-bargaining unit federal employees, praised the law's provisions on IT modernization but warned it could all be for naught if "a lack of adequate funds and ongoing continuing resolutions prevent the hiring and training of well qualified personnel to carry out the agency's mission."

"While we thank lawmakers for their dedication to IRS reform and modernization, we hope they will acknowledge funding disparities which may prevent this important mission from being carried out effectively," the organization said in a statement reacting to the new law.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.